IRSA Inversiones y Representaciones Sociedad Anónima (NYSE:IRS) Q3 2024 Results Conference Call May 8, 2024 10:00 AM ET

Company Participants

Matias Ivan Gaivironsky - CFO
Santiago Donato - IRO
Jorge Cruces - CIO

Matias Ivan Gaivironsky

So good morning, everybody. Today, we will review the results of our Nine Months Period of our Fiscal Year 2024. This was a special quarter with a big change on the political side, with the assumption of the new administration, a big change also on the economic side, with the first measures of the new administration that tend to stabilize the economy, reduce the deficit, reduce the inflation. So, so far, there were good results. This is too early to see results on our industry. But we have a strong hope in the new administration and to obtain and achieve an stabilization of the economy that will be very good for our industry. When we review the results of the nine month period, we will see a loss on the net income of around ARS111 billion, that is explained mainly with a noncash effect on the fair value of investment properties that I will explain later. Also, we see good results when we see the adjusted EBITDA with a 9% increase against the same period of the last year. During the quarter, there was a slowdown in consumption and our EBITDA, mainly in the malls, decreased compared with the same period of the last year, that also we will review later. Regarding tenant sales, there was a slowdown in consumption. So we will see a drop. Occupancy are at very good levels, both in malls and in offices. On the financial side, we decided to launch a new buyback program. So, so far, we acquired around 1.7% of our own stock. And also 10 days ago, we decided to pay a new dividend that we will start the distribution tomorrow for our local shareholders. The dividend is for ARS55 billion. So now I will turn the call with Santiago Donato, our IRO.

Santiago Donato

Thank you, Matias. Well, here, we can see the shopping malls operating figures, our tenant sales on the quarter and on the accumulated nine month period. On the quarter, as Matias mentioned, we have seen a decrease, a drop of 18.5%. This is the third quarter of 2024 compared to the third quarter of 2023 due to the acceleration of inflation and its impact on consumption during the third quarter of the fiscal year 2024. Occupancy remained very, very high at levels of 98% in our malls. And when we look at the accumulated sales, we are up almost 1% in the year compared to the same period of last year. So in the nine month period, we cover inflation. We're a little bit above inflation, because until December, the first semester of this fiscal year was really good. Sales were up like 10% in real terms. When we see the breakdown by type of business, we see that apparel is in the average, 19% down on the quarter. Services and miscellaneous are a little bit up as [hoped] on the distribution. And then restaurant, home and electronics and entertainment are a little bit even at levels of 25% to 30% decrease on the quarter. The next quarter is going to be a challenge as well to sustain tenant sales and activity and visitor flows in the malls. But we trust that in fiscal year 2025 that starts in July '25, activity in the malls should recover in line with the recomposition of salaries and the economic activity.